This paper explores the benefit derived from having access to a mobile phone. It examines the developmental uses of mobile phones in two East African countries: Kenya and Uganda. It focuses on the relationship between the economic and social upgrading or downgrading that result from the developmental uses of mobile phones, and specifically includes the effect of gender on project impacts. It is done by means of several case studies. In Kenya, the paper looks at three developmental projects making use of the M-Pesa platform, as well as two hubs in Nairobi where original ideas are incubated. In Uganda, it explores two uses of MTN’s mobile money facility and two innovative rural agricultural projects.
Research for this paper adopted both quantitative and qualitative techniques of data collection. For research related to the developmental uses of mobile money in Kenya and Uganda, data were derived from primary sources using interviews and observations. The instruments to collect data in Uganda included semi-structured interviews, key informant interviews, documentation and a checklist. This was complemented by a desk review to gather data from a variety of websites.
The study finds that all the cases and projects result in economic and social upgrading, although there is also some social downgrading. The study also extends and broadens the conceptualisation of economic and social upgrading as formulated by Capturing the Gains thus far. Finally, the paper shows how it differs from most other studies on the developmental uses of mobile phones in Sub-Saharan Africa—by focusing on social entrepreneurship, which, unlike private entrepreneurship, seeks primarily to create social value.
Key Findings:
- Innovative use is being made of applications based on the mobile money platforms developed by Safaricom in Kenya (M-Pesa) and MTN in Uganda (MobileMoney). These innovations span a remarkably wide range of economic activities in the private as well as the public sector, from manual irrigation pumps in agriculture to MFIs for small enterprises to payment of utility accounts and transfers of social assistance grants to vulnerable families and the aged.
- In Nairobi, Kenya, there is a high level of innovation taking place at a cluster of hubs and labs all located in the same building. These hubs and labs act as an incubator by providing an open space, expertise and mentoring for anybody and any organization wishing to develop applications in the computer and telecommunications industries for use on mobile phones.
- In Uganda, two case studies of the role that mobile phones play in enhancing agricultural performance of rural farmers, most of whom are women, confirmed positive outcomes with regard to both economic and social upgrading. At the same time, it was found that mobile phones and the telecommunication they provide are not sufficient in themselves to upgrade the lives of agricultural producers. It is therefore necessary to have a holistic approach to rural agricultural development that includes not only mobile telecommunications but also the necessary infrastructure and services.
- The developmental uses of mobile phones have been accompanied by economic and social upgrading, although there has also been some social downgrading as a result of job losses owing to the increased efficiency and cost reduction of economic upgrading. Some of the case studies also demonstrate that economic and social upgrading happen simultaneously when the productivity, income and employment of small-scale farmers in Kenya and Uganda all increase as an outcome of the developmental application of mobile phones.
- All but one of the case studies in this paper are examples of social entrepreneurship. This means the individuals and organizations that developed the entrepreneurial project using mobile phones not only upgraded themselves but also raised the capacity of the recipients of the projects to upgrade themselves economically and socially.
